v3.26.1
Acquisitions
 3 Months Ended
Jun. 30, 2026
Business Combination [Abstract]  
Acquisitions

NOTE 2 - ACQUISITIONS:

FlackTek

On January 23, 2026, the Company acquired FlackTek Manufacturing, LLC and FlackTek Sales, LLC (collectively, "FlackTek"), a provider of advanced mixing and material processing solutions. FlackTek's systems are sold to OEMs, research and development centers, defense laboratories, and industrial manufacturers serving adhesives, sealants, functional coatings, composites, electronics, and other advanced materials markets. FlackTek adds a product portfolio with a shared customer base and an installed footprint that extends across the full value chain. Its mixing systems are process-critical and market-agnostic, serving defense, energetics, oil & gas, food, battery, aerospace and space, medical, and other industrial applications where precision, repeatability, and consistency drive value.

This transaction was accounted for as a business combination which requires that assets acquired and liabilities assumed be recognized at their fair value as of the acquisition date. The purchase price of $36,205 was comprised of 76 shares of the Company's common stock, representing a value of $5,678 at a price of $74.89 per share, and cash consideration at close of $26,456, subject to certain potential adjustments, including a customary working capital adjustment. The cash consideration was funded through borrowings on the Company's line of credit. The purchase agreement included a contingent earn-out to earn up to an additional $25,000 in future performance-based cash earnouts over four years beginning with fiscal 2027, based upon achieving progressively increasing adjusted EBITDA performance targets each year. At the acquisition date, a liability of $5,638 was recorded for the contingent earn-out.

The preliminary purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair value at the date of acquisition and the amount exceeding the fair value of $11,092 was recorded as goodwill, which is deductible for tax purposes. During the first quarter of fiscal 2027, the customary working capital adjustments were settled, which resulted in the receipt of $1,567 of cash. The net impact of the settlement of closing working capital, as well as other immaterial measurement period adjustments to the opening balance sheet, resulted in a net reduction of the purchase price of $817 and a reduction of goodwill of $752 during the first quarter of fiscal 2027. Goodwill generated in the acquisition is related to FlackTek's assembled workforce, synergies between the Company’s other operations and FlackTek that are expected to occur as a result of the combined engineering knowledge, the ability of each of the operations to leverage each other’s technology solutions, and the Company’s ability to utilize acquired management's knowledge in providing complementary product offerings to the Company’s customers. The following table summarizes the preliminary purchase price allocation of the assets acquired and liabilities assumed:

 

 

January 23,

 

 

 

2026

 

Assets acquired:

 

 

 

  Cash and cash equivalents

 

$

66

 

  Trade accounts receivable, net of allowances

 

 

3,852

 

  Inventories

 

 

4,154

 

  Prepaid expenses and other current assets

 

 

84

 

  Property, plant & equipment, net

 

 

2,030

 

  Operating lease assets

 

 

1,448

 

  Goodwill

 

 

11,092

 

  Customer relationships

 

 

3,400

 

  Technology and technical know-how

 

 

13,300

 

  Tradename

 

 

6,700

 

  Other long term asset

 

 

31

 

Total assets acquired

 

 

46,157

 

Liabilities assumed:

 

 

 

  Accounts payable

 

 

2,252

 

  Accrued compensation

 

 

646

 

  Accrued expenses and other current liabilities

 

 

3,988

 

  Customer deposits

 

 

1,618

 

  Operating lease liabilities

 

 

1,448

 

Total liabilities assumed

 

 

9,952

 

Purchase price

 

$

36,205

 

 

The fair value of acquisition-related intangible assets includes customer relationships, technology and technical know-how, and tradename. The tradename is an indefinite-lived intangible asset and is included in the line item Other intangible assets, net in the Consolidated Balance Sheets. The fair value of tradename was calculated using a Relief from Royalty method, which develops a market based royalty rate used to reflect the after tax royalty savings attributable to owning the intangible asset. The fair value of customer relationships and technology and technical know-how were calculated using an income approach, specifically the Multi Period Excess Earnings method, which incorporates assumptions regarding retention rate, new customer growth, obsolescence factors, and customer related costs.

Customer relationships are amortized in selling, general and administrative expense on a straight line basis over their estimated useful lives of twelve years. Technology and technical know-how is amortized in cost of products sold on a straight line basis over its estimated useful life of nine years.

Pro forma information

The following unaudited pro forma information presents the consolidated results of operations of the Company as if the FlackTek acquisition had occurred at the beginning of the year ended March 31, 2025:

 

 

 

Three Months Ended

 

 

 

June 30,

 

 

 

2026

 

 

2025

 

Net sales

 

$

71,342

 

 

$

60,901

 

Net income

 

 

4,171

 

 

 

3,546

 

Income per share

 

 

 

 

 

 

Basic

 

$

0.36

 

 

$

0.32

 

Diluted

 

$

0.36

 

 

$

0.32

 

 

Acquisition contingent earn-out liabilities

A rollforward of contingent earn-out liabilities is as follows:

 

Balance at March 31, 2026

 

$

6,482

 

Change in fair value

 

 

577

 

Payments

 

 

—

 

Balance at June 30, 2026

 

$

7,059

 

 

The change in the fair value of the contingent earn-out liabilities is included in Other operating expense (income), net in the condensed consolidated statements of operations. Of the balance as of June 30, 2026, $3,967 is included in accrued expenses and other current liabilities and $3,092 is included in other long-term liabilities in the condensed consolidated balance sheet. The balance of $6,482 as of March 31, 2026 is included in other long-term liabilities in the condensed consolidated balance sheet.